Supply and Demand, Nigerian Style

Every thug in Nigeria needed a machete to help ensure that the general elections in the country were conducted “properly.”

Take a guess what happened to the price of machetes after the election, according to Reuters.

To be honest, though, I have a hard time believing this is true for the same reason that gun control laws don’t work. Machetes, like guns, are long-lived durable goods. The stock of used machetes is far greater than the flow of new machetes being sold at any one time. For a thug, a used machete is a very close substitute for a new machete. So if new machetes were selling for double their usual price before the election, I would have expected many farmers to sell their used machetes to thugs at inflated prices, knowing that after the election they could buy them back cheaply. (Of course, it is also possible that having a machete for self-defense was extremely valuable to farmers before the election because of marauding thugs, in which case prices really might be expected to temporarily rise.)

(Hat tip: Doug Nelson)


frankenduf

I hate to say duh, but- duh- case in point: farmer sells M to "thug"- thug takes machete and then says gimme my money back- farmer says you can't threaten me I have a... oops

jonathank

What if because of the election we have a new crop of thugs entering the market? The new entrants might drive up the price for a short time as they outfit themselves to be thuggish. Some of those thugs might not stay in the thug biz and some percentage of those might need the cash from an immediate sale of their thug assets.

SuperRob

"if new machetes were selling for double their usual price before the election, I would have expected many farmers to sell their used machetes to thugs at inflated prices, knowing that after the election they could buy them back cheaply."

Like "frankenduf" said ... I'd expect that once the thug has your machete, he'll get whatever price he commands while it's pressed against your throat. Helps to get into the mind of a thug when thinking about these kinds of issues.

egretman

Who's the king of Nigeria? The one guy with the gun?

Lot of fertile ground for the NRA over there.

zbicyclist

Another simple explanation is that machete makers saw some increase in demand, but then oversupplied the market, driving down prices.

Is this happening with the US real estate market? They are STILL starting teardowns to put up McMansions in my village, despite the forest of for-sale signs.

Along the lines of Frankenduf's explanation: If you were a Nigerian farmer and those around you were getting MORE machetes, wouldn't you want to hold on to yours? Besides, being a subsistence farmer, you probably only have the machete(s) you actually need for farming.

prosa

Now we're going to see long, heartfelt e-mails from Nigeria asking for money to buy machetes.

egretman

Dear prosa person,

I am young girl from my neighboring farm. The night many men come to my home with machetes. They take my young brother.

Can you aid me? I need with assistance of you to provide please my family with own machete. But machete cost very much here in Nigeria.

I am sending check for $200,000 in your American dolars from bank of National Nigeria Bank, LLC. These monies you see are from uncle in oil fields who won lottery. But for reasons of war is not cashable no longer more here. You take your share for good work all money but send back to me may I suggest $2000 for to buy machete myself.
God willing my dear family then have machete for when bad men return.

Thanks you now for your intensive help before hand.

Signed,

Rollo Mambasa

thepetfly

A machete for $3, now that is something you can't find at Wal-Mart.

BobBrown

As a farmer, would you sell your tool / weapon of defense in advance of civil unrest? I would make sure I had plenty in stock just in case.

As a thug, wouldn't you prefer a new shiny weapon of intimidation rather than an old hacked and rust one?

Now, once the unrest is finished there is a large supply of barely used machetes and it will take some time for attrition to take its toll. Especially if the farmers bought extra "just in case."

frankenduf

I hate to say duh, but- duh- case in point: farmer sells M to "thug"- thug takes machete and then says gimme my money back- farmer says you can't threaten me I have a... oops

jonathank

What if because of the election we have a new crop of thugs entering the market? The new entrants might drive up the price for a short time as they outfit themselves to be thuggish. Some of those thugs might not stay in the thug biz and some percentage of those might need the cash from an immediate sale of their thug assets.

SuperRob

"if new machetes were selling for double their usual price before the election, I would have expected many farmers to sell their used machetes to thugs at inflated prices, knowing that after the election they could buy them back cheaply."

Like "frankenduf" said ... I'd expect that once the thug has your machete, he'll get whatever price he commands while it's pressed against your throat. Helps to get into the mind of a thug when thinking about these kinds of issues.

egretman

Who's the king of Nigeria? The one guy with the gun?

Lot of fertile ground for the NRA over there.

zbicyclist

Another simple explanation is that machete makers saw some increase in demand, but then oversupplied the market, driving down prices.

Is this happening with the US real estate market? They are STILL starting teardowns to put up McMansions in my village, despite the forest of for-sale signs.

Along the lines of Frankenduf's explanation: If you were a Nigerian farmer and those around you were getting MORE machetes, wouldn't you want to hold on to yours? Besides, being a subsistence farmer, you probably only have the machete(s) you actually need for farming.

prosa

Now we're going to see long, heartfelt e-mails from Nigeria asking for money to buy machetes.

egretman

Dear prosa person,

I am young girl from my neighboring farm. The night many men come to my home with machetes. They take my young brother.

Can you aid me? I need with assistance of you to provide please my family with own machete. But machete cost very much here in Nigeria.

I am sending check for $200,000 in your American dolars from bank of National Nigeria Bank, LLC. These monies you see are from uncle in oil fields who won lottery. But for reasons of war is not cashable no longer more here. You take your share for good work all money but send back to me may I suggest $2000 for to buy machete myself.
God willing my dear family then have machete for when bad men return.

Thanks you now for your intensive help before hand.

Signed,

Rollo Mambasa

thepetfly

A machete for $3, now that is something you can't find at Wal-Mart.

BobBrown

As a farmer, would you sell your tool / weapon of defense in advance of civil unrest? I would make sure I had plenty in stock just in case.

As a thug, wouldn't you prefer a new shiny weapon of intimidation rather than an old hacked and rust one?

Now, once the unrest is finished there is a large supply of barely used machetes and it will take some time for attrition to take its toll. Especially if the farmers bought extra "just in case."